Strategic Characterization of Water System Infrastructure and Management

Abstract

The capital needs of America’s water systems have received substantial, recent attention within engineering and public policy circles. Various groups contend that national water systems face a multibillion dollar annual funding gap and advocate for a considerable federal role in supplying the necessary capital to fulfill anticipated requirements. Opposition groups contest these assertions, arguing that federal subsidies will reduce the incentive for the industry to develop lasting solutions. The industry’s path forward remains unsettled as this debate continues. Missing from these discussions, however, is objective evidence concerning the state of the industry. Accordingly, this paper presents a rational methodology to characterize community water systems to provide a basis for (1) understanding the state of systems within the national portfolio; and (2) guiding strategic assessment and policy development. Common indicators are deployed that rely upon widely available operating and financial data and make use of thresholds that serve as estimates of industrywide averages. The developed methodology was applied to a national cross section of large water systems. The evidence indicates that large systems are adequately positioned to handle near-term capital challenges, so a substantial federal role is unnecessary. In addition, alternatives that might improve national water provision remain largely untested, so strategies that support the exploration of these approaches are recommended. The work presented is a key step toward normalizing an industry that is decentralized and locally managed.